REVIEW OF THE RETAIL PRICE OF LIQUEFIED PETROLEUM GAS IN THE MONTH OF MAY, 2019

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends in the world petroleum products’ prices and changes in other macroeconomic fundamentals in the local market and their impact on energy prices.

 

LPG PRICES ON THE INTERNATIONAL MARKET

The average FOB price for LPG increased in the month of April, 2019 when compared to the price noted in the month of March, 2019 used in determining the ruling retail price. The FOB price increased by 15.51% from R8.90/kg as noted in the month of March 2019 to R10.28/kg in the month of April 2019.

 

EXCHANGE RATE MOVEMENT

Since the last price revision in April, 2019 the Malawi Kwacha has appreciated against the South African Rand by 0.69% from K52.24/ZAR to K51.88/ZAR.

 

RESULTANT RETAIL PRICE

MERA reviewed the combined effect of the movement of the LPG FOB prices and exchange rate of the Malawi Kwacha to the South African Rand and noted that the landed cost of LPG increased by 13.88%. Under the Automatic Pricing Mechanism (APM), LPG qualified for a price adjustment since the change in landed cost is beyond the ±5% band.

However, the MERA Board resolved to cushion the impact of the increased landed cost of LPG through the Price Stabilization Fund and therefore the retail price of LPG has been maintained as presented below: -     

 

Current Maximum LPG Retail Price (MWK/Kg)

Recommended Maximum LPG Retail Price (MWK/Kg)

% Change

            2,044.22

               2,044.22

0

 All operators are required to sell LPG at a price not exceeding this maximum retail price.

 

SIGNED

 

Rt. Rev. Dr. J.P. Bvumbwe                                   Dr. Collins Magalasi

BOARD CHAIRPERSON                                          CHIEF EXECUTIVE OFFICER

9th May, 2019                                                        9th May, 2019